Table 19-11
Output Per Hour Production and Production
of Work

question 244

Multiple Choice

Table 19-11
Output per hour Production and Production
of work Consumption without Trade with Trade
$\begin{array}{|l|c|c|c|c|c|c|}\hline & \text { Clocks } & \text { Hats } & \text { Clocks } & \text { Hats } & \text { Clocks } & \text { Hats } \\\hline \text { Denmark } & 6 & 3 & 900 & 150 & 1,200 & 0 \\\hline \text { Belize } & 1 & 2 & 150 & 100 & 0 & 400 \\\hline\end{array}$ Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 19-11 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 19-11.All of the following are terms of trade that could possibly benefit both countries except

• A) 1 hat : 3/5 of a clock
• B) 1 hat : 1 clock
• C) 1 hat : 1.5 clocks
• D) 1 hat : 2.5 clocks

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Definitions:

Fixed Expenses

Costs that do not change with the level of production or sales over a certain period, such as rent, salaries, and insurance.

Selling Price

The amount of money charged for a product or service offered to customers.

Absorption Costing

A method of accounting for costs in which all costs of manufacturing a product, including both fixed and variable costs, are considered product costs.